Central Pacific Financial Corp New · NYSE:CPF
Central Pacific Financial Corp New — Central Pacific Financial — Investor Presentation (September 2019)
30 slides from Central Pacific Financial Corp New's investor presentation, Sep 3, 2019
Slide 1: Central Pacific Financial Corp. September 2019
A. CATHERINE NGO PresidentPAUL & YONAMINEChief Executive Officer Chief Executive Officer DAVID S. MORIMOTO ExecutiveA. CATHERINE Vice President NGO & PresidentChief Financial Officer AUGUST 2018 DAVID S. MORIMOTO Chief Financial Officer SEPTEMBER 2019
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation may contain forward-looking statements concerning: projections of revenues, expenses, income or loss, earnings or loss per share, capital expenditures, the payment or nonpayment of dividends, capital position, net interest margin or other financial items;
Slide 3: Corporate Profile
CORPORATE PROFILE Founded in 1954 by Japanese-American veterans of World War II 65 years later, Central Pacific continues to MARKET work for our customers, shareholders, INFORMATION employees and the community. NYSE TICKER CPF Assets $5.9B Market Cap $786 Mil Share Price $27.59 Dividend Yield 3.1% C
Slide 4: CPB Branch Positioning
CPB BRANCH POSITIONING Oahu (27) Kauai (2) Maui (4) 35 BRANCHES IN THE STATE OF HAWAI'I Hawai'i (2) Concentrated on Oahu where 70% of the State’s population lives. 4
Slide 5: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020- INVESTING FOR 12 THE FUTURE NICHE MARKET STRENGTHS 3 SUPPORTED WITH 2 STRONG STRONG HAWAII PRODUCTS MARKET & ATTRACTIVE 4 MARKET POSITION SOLID CAPITAL AND CREDIT 5
Slide 6: RISE2020 - Investing for the Future
A. CATHERINE NGO President & Chief Executive Officer DAVID S. MORIMOTO Executive Vice President & Chief Financial Officer AUGUST 2018 To learn more, go to cpb.bank 6
Slide 7: RISE2020 Initiatives
RISE2020 INITIATIVES • Best-in-class online and • Best-in-class small mobile banking business and cash platforms 1 management products DIGITAL • cpb.bank website REVENUE • Japan business BANKING ENHANCEMENTS development • Digital marketing, data 2 analytics and mining • Enterprise-wide sales managem
Slide 8: CPB invests $40 million in facilities and technology
LR SSeS einen Tesieess apart: CPB invests $40 million in facilities and technology g Br Star K Advertiser E) com ovina mewn 20 WEDNESDAY 7/24/19 | Central By Alin Schafers "] “al Pacific Bank | CENTRAL PACIFIC BANK'S "RISE2020" PROJECT plans to pls tsp $0 aon . INVESTMENT I FACILITIES AND TECHNOLOGY
Slide 9: RISE2020 - Main Branch Transformation
RISE2020 - MAIN BRANCH TRANSFORMATION 1 2 9
Slide 10: RISE2020 Milestones and Financial Targets
RISE2020 MILESTONES AND FINANCIAL TARGETS 2019 2020 2021 2022 MILESTONES: Revenue Enhancements 1 Outsource Residential 3Q19 Loan servicing Commercial loan 4Q19 2 origination system Launch new online and 1Q20 mobile banking platform Plaza building and main 1Q21 branch completion ATM transformation 4Q
Slide 11: Niche Banking Growth Opportunities
NICHE BANKING GROWTH OPPORTUNITIES . SMALL SBA Lender of the Year Category II, 7 years in a row, with more loans originated than the BUSINESSES 3 other large Hawaii banks combined CPB leads the Hawaii . Streamlined credit underwriting, Small Business market documentation and booking processes . Rela
Slide 12: Small Business Online Banking Product
SMALL BUSINESS ONLINE BANKING PRODUCT . Valuable tool for small businesses to automate banking transactions and processing . Multi-user logins . Mobile functionality . No monthly fees . Strong and consistent client enrollments since product launch in July 2016 12
Slide 13: Flagship Deposit Product - Exceptional Plan
FLAGSHIP DEPOSIT PRODUCT- EXCEPTIONAL PLAN Plan links personal deposit accounts with a combined minimum balance of $10,000 and offers numerous free benefits and services to the customer. PRODUCT SUMMARY CUSTOMER BENEFITS Total Balances $1.4 Billion ATM fees waived Wtd Avg Rate 0.11% Free checks
Slide 14: Deposit Pricing Sensitivity
DEPOSIT PRICING SENSITIVITY CYCLE TO DATE 4Q15 2Q19 Beta Fed Funds 0.25% 2.50% 2.25% Total Deposit Rates 0.09% 0.53% 0.44% 20% Core Rates ($4.1B) 0.06% 0.20% 0.14% 6% Non-Core Rates ($0.9B) 0.21% 2.02% 1.81% 80% Core deposits which totals $4.1B have had low repricing this cycle to date. No
Slide 15: Strong Hawaii Market
STRONG HAWAII MARKET REAL GDP HOUSING ECONOMIC DRIVER LABOR MARKET $80.8B in 2018, $775,000 Tourism drives 2.8% up 1.0% from median single ~20% of Hawaii unemployment 2017. family home price GDP; 5.2M visitor compared to on Oahu arrivals and $8.9B 3.7% nationally in visitor spending Note: Real GDP d
Slide 16: Diversity of Tourism - Visitor Arrivals
DIVERSITY OF TOURISM – VISITOR ARRIVALS Visitor Arrivals Korea Europe 2.0% Australia / 1.1% 2019 New Zealand China 3.4% Other 1.2% 4.4% Canada 6.1% US West 44.2% Japan 2019 GROWTH 14.7% REGIONS US West +10% US East +4% Other +7% Canada +2% Japan +1% US East 22.9% Source: Hawaii Tourism Authority. Da
Slide 17: Significant Hawaii Residential Development
SIGNIFICANT HAWAII RESIDENTIAL DEVELOPMENT . Kaka’ako: 22 New High- Rise Condominiums in Honolulu. 13 completed, 9 in progress or planning. . Ho’opili: 11,750 new home development project with building permits of $4.6B underway in West Oahu . Koa Ridge: 3,500 new home development project underway in
Slide 18: Hawaii Public & Commercial Development
HAWAII PUBLIC & COMMERCIAL DEVELOPMENT . Rail Construction for 20-mile route on Oahu with an estimated cost of $8.3B . Modernization of the Daniel K. Inouye International Airport in Honolulu, $1.3B project . Atlantis Resort Development in West Oahu, 26 acres with an estimated cost of $2B Source: Hon
Slide 19: Attractive Position in Hawaii Market
ATTRACTIVE POSITION IN HAWAII MARKET LARGE SMALL INSTITUTIONS INSTITUTIONS . First Hawaiian Bank . Territorial Savings . $20B total assets . $2B total assets . . 58 branches $5.9B total assets . 30 branches . 35 branches . Bank of Hawaii . Hawaii National Bank . $18B total assets . $0.6B total asset
Slide 20: Strong Capital Position & Continued Optimization
STRONG CAPITAL POSITION & CONTINUED OPTIMIZATION Regulatory Capital Ratios As of June 30, 2019 18.0% 13.9% Total CASH DIVIDENDS RBC 16.0% . $0.23 per share in 2Q19, up 10% YoY 1.2% . Dividend yield of 3.1%* 14.0% 1.1% . Dividend payout ratio of 49% in 2Q19 12.0% Tier 2 10.0% Tier 1 SHARE REPURCHASES
Slide 21: Solid Credit Position
SOLID CREDIT POSITION $600 $500 Non-Performing Assets $500 $400 $303 Millions $300 $196 $200 0.02% of $90 Total Assets $100 at 6/30/19 $47 $42 $16 $9 $4 $3 $1 $- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2Q19 C&D Comml Mtg Resi Mtg/Home Equity C&I/Other 21
Slide 22: Strong Reserve Coverage
STRONG RESERVE COVERAGE ALLL/Total Loans 10.00% 8.89% 9.00% 8.00% 7.00% 6.75% 5.91% 6.00% 5.00% 4.37% 4.00% 3.19% 2.97% 2.00% 1.97% 2.53% 3.00% 2.08% 1.97% 1.69% 1.61% 1.48% 1.48% 1.33% 1.23% 1.17% 1.14% 2.00% 1.11% 0.98% 0.94% 0.95% 0.92% 1.00% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 23: Shareholder Value Drivers
SHAREHOLDER VALUE DRIVERS 1 RISE2020- INVESTING FOR 12 THE FUTURE NICHE MARKET STRENGTHS 3 SUPPORTED WITH 2 STRONG STRONG HAWAII PRODUCTS MARKET & ATTRACTIVE 4 MARKET POSITION SOLID CAPITAL AND CREDIT 23
Slide 24: Thank You
A. CATHERINE NGO President & Chief Executive Officer DAVIDTHANK S. MORIMOTO YOU Executive Vice President & Chief Financial Officer AUGUST 2018 24
Slide 25: Appendix
A. CATHERINE NGO President & Chief Executive Officer DAVIDAPPENDIX S. MORIMOTO Executive Vice President & Chief Financial Officer AUGUST 2018 25
Slide 26: Financial Highlights
FINANCIAL HIGHLIGHTS QTD QTD YEAR ENDED DECEMBER 31, ($ in millions) 2Q19 1Q19 2018 2017 2016 2015 2014 Balance Sheet (period end data) Loans and leases $4,247.1 $4,101.6 $4,078.4 $3,770.6 $3,524.9 $3,211.5 $2,932.2 Total assets 5,920.0 5,841.4 5,807.0 5,623.7 5,384.2 5,131.3 4,853.0 Total deposits
Slide 27: Loan Portfolio Trend
LOAN PORTFOLIO TREND (2011- Balances Outstanding Q2 2019) $4,500 $4,247 $4,078 7.5 Yr. CAGR $4,000 $3,771 $3,525 $3,500 $3,212 $3,042 $2,932 $3,000 $2,631 $2,500 $2,204 +11.2% $2,169 $2,064 +20.1% Millions $2,000 $1,500 +17.1% $1,000 -10.1% $500 +6.1% $0 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 28: Loan Portfolio Composition
LOAN PORTFOLIO COMPOSITION ($ IN MILLIONS) JUNE 30, 2019 JUNE 30, 2018 CHANGE BALANCE % BALANCE % $ % Hawaii Portfolio Residential Mortgage $1,517 36% $1,377 35% $140 10% Home Equity 473 11% 431 11% 42 10% Commercial Mortgage 906 21% 830 21% 76 9% Commercial & Ind/Leasing 436 10% 412 11% 24 6% Const
Slide 29: Hawaii Deposit Pricing Advantage
HAWAII DEPOSIT PRICING ADVANTAGE Total Deposit Cost 2.50% 2.35% 2.00% 1.63% 1.59% 1.50% 1.09% 1.05% 1.05% 0.89% 1.00% 0.78% 0.64% 0.54% 0.52% 0.53% 0.40% 0.36% 0.39% 0.50% 0.30% 0.34% 0.33% 0.23% 0.14% 0.11% 0.09% 0.09% 0.12% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2Q19 CPF Peer
Slide 30: Creating Value for Our Employees & the Community
CREATING VALUE FOR OUR EMPLOYEES & THE COMMUNITY BEST PLACES TO WORK . Central Pacific Bank has been awarded as one of the “Best Places to Work” by Hawaii Business Magazine for the last 10 years in a row. . Average employee tenure for VP’s and above is 12 years. COMMUNITY FOCUS . CPB Foundation has
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